Federated Department Stores, Inc. announced a long-planned management transition and change in its top corporate management structure. Terry J. Lundgren, president/chief operating officer and chief merchandising officer, has been elected by the company’s board of directors to succeed James M. Zimmerman as Federated’s chief executive officer, effective tomorrow. Zimmerman will remain as chairman of the company.

Lundgren, 50, will assume the new title of president and chief executive officer. Under the new corporate structure, there will be five corporate vice chairs reporting directly to Lundgren. They include Ronald W. Tysoe, 49, who since 1990 has served as Federated vice chair, responsible for finance and real estate, and four new vice chairs who were promoted to this position today.

    The new vice chairs are:

  • Thomas G. Cody, 61, who has served as executive vice
    president/legal and human resources since 1992. As vice
    chairman, he will continue to be responsible for legal and
    human resources, as well as internal audit, external affairs
    and the company’s philanthropic activities.

  • Tom Cole, 54, who currently serves as chairman of Federated
    Logistics & Operations, which includes store design and
    construction; the Federated Systems Group and the company’s
    Financial, Administrative & Credit Services divisions. Cole
    will continue to be responsible for these support operations
    as vice chairman.

  • Janet Grove, 51, who has served as chairman of the New
    York-based Federated Merchandising Group (FMG) since 1998. She
    will maintain responsibility for FMG, which encompasses the
    company’s merchandising, private brand and product development
    operations.

  • Susan Kronick, 51, who has been group president for regional
    department stores since April 2001. Under the new management
    structure, she will be responsible for all of the company’s
    department store divisions – Macy’s East, Macy’s West and
    Bloomingdale’s, as well as Burdines, The Bon Marche and
    Rich’s/Lazarus/Goldsmith’s.

“I am very pleased that the board has chosen Terry Lundgren to succeed me as chief executive officer,” Zimmerman said. “There is no one more qualified or deserving. Terry’s contributions to Federated since becoming president in 1997 have been significant, including spearheading our private brand merchandising and overseeing our strategic department store initiatives. Terry’s vision is for Federated to continue to reinvent department store retailing and as CEO, I am confident that his creative vision and strong executive leadership skills will serve the company well in the years ahead.”

Speaking on behalf of the company’s Board of Directors, Joseph A. Pichler, chairman/CEO of the Kroger Co., said the board believes that “this succession process has continued Federated’s history of pursuing strong corporate governance practices that will lead to a seamless transition.”

Pichler called Zimmerman “a chief executive of enormous talent and integrity, whose leadership has made Federated one of the nation’s most successful retail companies. Under his leadership, the company has more than doubled in size, and has grown its operating income from about $250 million to $1.3 billion. This succession plan enables Federated to continue benefiting from Jim Zimmerman’s expertise through the transition period, while turning the CEO’s role over to an exceptionally well-qualified and proven retail executive in Terry Lundgren.”

Lundgren, commenting on his election as Federated’s CEO, said, “I am extremely pleased and honored that the board has placed this trust in me. Federated is where I started my retail career, and I am proud and delighted to succeed Jim Zimmerman as CEO. I have been fortunate to have the opportunity to work closely with Jim over the last nine years, and look forward to continuing that relationship for the foreseeable future. I also feel fortunate to have such an incredible wealth of talent in the five vice chairmen, as well as in Karen Hoguet, our chief financial officer, and our division principals, each of whom will play key roles in setting our corporate priorities and implementing our future strategies.

“I am committed to the continued success of this company and to all of the outstanding people who shape and define it for our customers in countless capacities every day,” Lundgren added. “Together, we will continue to build on Federated’s considerable strengths as we work hard to ensure its future success.”

In addition to chairing the board, Zimmerman, 59, will work with Lundgren on overall corporate strategic initiatives during the transition period, which he said would be no longer than a year. In a communication to Federated employees today, Zimmerman said he has had numerous conversations with the Federated board about his intention to step down in this timeframe, reflecting his “personal goal to retire by age 60 and spend the next 10 years of my life doing something new, challenging and totally different.” Although he has no specific plans at this time, Zimmerman said he will continue to make Cincinnati his permanent home and plans to remain active in the Cincinnati community.